Exploring Viable Dairy Farm Strategies for Coping with Rising Corn Grain Prices

Authors: GHEBREMICHAEL, LULA - UNIV OF VERMONT; Veith, Tameria - Tamie; CEROSALETTI, P - CORNELL COOP EXT; DEWING, D - CORNELL COOP EXT; Rotz, Clarence - Al

Submitted to: Journal of Dairy Science
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 4/20/2009
Publication Date: 7/24/2009
Citation: Ghebremichael, L.T., Veith, T.L., Cerosaletti, P.E., Dewing, D.E., Rotz, C.A. 2009. Exploring economically and environmentally viable northeastern US dairy farm strategies for coping with rising corn grain prices. Journal of Dairy Science. 92(8):4086-4099.

Interpretive Summary: Interest in corn grain as an ethanol source has contributed to a $3 per bushel rise in 2008 corn grain prices as compared to the 1998-2005 average and caused New York dairy farmers to try to avoid profit decreases by growing more corn silage and reducing corn grain purchases. The Integrated Farm Systems Model was used to assess sediment and phosphorus loss impacts from expanding corn fields, benefits of no-till and cover crops, and other management strategies to help maintain profits. No-till and cover crops on corn lands greatly reduced erosion and phosphorus losses through runoff. Strategies such as reducing phosphorus in feed supplements, improving forage quality, and growing small grains on marginal lands helped maintain net-profits without degrading soil or water quality. Strategy combinations are recommended whenever feasible for specific farms.

Technical Abstract: Recent exploration into the use of corn grain as an ethanol source has contributed to a $3 per bushel rise in 2008 corn grain prices as compared to the 1998-2005 average. New York dairy farmers are attempting to avoid resulting tight marginal profits by growing more corn silage and reducing corn grain purchases. Correspondingly, concerns exist about environmental impacts of expanding corn area and ongoing economic challenges facing dairy farms due to higher-priced corn grain feeds. To this effect, a model-based study using the Integrated Farm Systems Model on two, previously validated, New York dairy farms was employed to assess 1) sediment and phosphorus (P) loss impacts from expanding corn fields, 2) benefits of using no-till and cover cropping on the corn crops, and 3) alternatives to the economical challenges of the current farming system as the price ratio of milk to corn grain continues to decline. Based on the simulation results, expanding corn silage production by 3% of the total farm area increased sediment and sediment-attached P losses by 17-27% and 13-22%, respectively. Although the corn fields represent only 11-13% of total farm area, total sediment and sediment-attached P losses from the corn fields accounted for 63-74% and 40-47%, respectively, of total farm losses. Implementations of no-till and cover crop management on corn fields were predicted to reduce sediment losses by 76-92% and 66-71% and sediment-attached P losses by 65-84% and 39-42%, respectively. In addition, increasing on-farm grass productivity while feeding cows a high-quality, high-forage diet and precise dietary P levels offered dual benefits: 1) improved farm profitability from reduced purchases of dietary protein and P supplements, and 2) decreased runoff P losses from reduced P-levels in applied manure. Moreover, alternatives such as growing additional small grains on marginal lands and increasing milk production levels demonstrated great potential in increasing farm profitability. Overall, it is crucial that conservation measures such as no-till and cover cropping be implemented on new or existing corn lands as these areas pose the highest threat for P losses through runoff. Although alternatives that would likely provide the largest net-profit were evaluated one at a time to better quantify their individual impacts, combinations of these strategies are recommended whenever feasible for specific farms.